By Dan Williams and Matt Spetalnick WASHINGTON (Reuters) - Israeli Prime Minister Benjamin Netanyahu warned the United States on Tuesday that it was negotiating a bad deal with Iran that could spark a "nuclear nightmare," drawing a rebuke from President Barack Obama and exposing a deepening U.S.-Israeli rift. Delivering dueling messages within hours of each other, Netanyahu made his case against Obama's Iran diplomacy in a speech to Congress that aligned himself with the president's Republican foes. Obama responded in the Oval Office, declaring in a frustrated tone that Netanyahu offered "nothing new." In its response, the Iranian government denounced Netanyahu's 39-minute speech as "boring and repetitive," the state news agency IRNA said.

By Arshad Mohammed MONTREUX, Switzerland (Reuters) - Iran rejected on Tuesday as "unacceptable" U.S. President Barack Obama's demand that it freeze sensitive nuclear activities for at least 10 years but said it would continue talks on a deal, Iran's semi-official Fars news agency reported. Iran laid out the position as the U.S. and Iranian foreign ministers met for a second day of negotiations and as Israeli Prime Minister Benjamin Netanyahu delivered a stinging critique of the agreement they are trying to hammer out. Iranian Foreign Minister Mohammed Javad Zarif and U.S. Secretary of State John Kerry met a day after Obama told Reuters that Iran must commit to a verifiable halt of at least 10 years on sensitive nuclear work for a landmark atomic deal to be reached. "Iran will not accept excessive and illogical demands," Zarif was quoted by Fars as saying.

By Pavel Polityuk and Maria Tsvetkova KIEV/DONETSK, Ukraine (Reuters) - Three Ukrainian servicemen were killed and nine wounded as pro-Russian rebels shelled government positions despite a ceasefire deal, the military said on Tuesday, announcing Kiev's highest casualty toll in several days. The losses underscore the fragility of a two-week-old ceasefire agreement which Ukrainian President Petro Poroshenko has called the last chance for peace between Kiev and the separatists he says are being armed by Russia. In recent days both sides have been withdrawing artillery from the front line, the next stage in a peace agreement brokered by France and Germany.

By Ahmed Rasheed and Dominic Evans BAGHDAD (Reuters) - Thousands of Iraqi soldiers and Shi'ite militiamen sought to seal off Islamic State fighters in Tikrit and nearby towns on Tuesday, the second day of Iraq's biggest offensive yet against a stronghold of the Sunni militants. Iranian military commander Qassem Soleimani, who has helped coordinate Baghdad's counter-attacks against Islamic State since it seized much of northern Iraq in June, was overseeing at least part of the operation, witnesses told Reuters. His presence on the frontline highlights neighboring Iran's influence over the Shi'ite fighters who have been key to containing the militants in Iraq.

By Jane Wardell SYDNEY (Reuters) - Australian Prime Minister Tony Abbott on Wednesday said he was "revolted" by the looming execution of two convicted Australian drug traffickers as preparations were under way to move the men to an island where they will be shot. The planned executions of Myuran Sukumaran, 33, and Andrew Chan, 31, have ratcheted up diplomatic tensions amid repeated pleas of mercy for the pair. Indonesian President Joko Widodo has adopted a tough stance on carrying out harsh penalties for drug traffickers. Widodo has denied clemency to 11 convicts currently on death row, including the Australian nationals, and warned other countries to stay out of Indonesia's sovereign affairs.

The United States said on Tuesday it would respond through diplomatic channels to Venezuela's demand for a cut in U.S. Embassy staff in Caracas, but added that Caracas had drastically underestimated its own diplomatic presence in the United States. Venezuela on Monday ordered the U.S. Embassy in Caracas to come up with a plan within 15 days to reduce staff to 17 from 100 amid the worst diplomatic flare-up between the two ideological foes since socialist President Nicolas Maduro was elected in 2013. Maduro said there were 17 staffers at his country's embassy in Washington, a figure disputed by the United States during a brief meeting on Monday between Venezuelan Foreign Minister Delcy Rodriguez and U.S. Charge d'Affaires Lee McClenny. During the meeting, "we noted that the numbers the Venezuelan government has offered regarding its mission in the United States dramatically understate the number of Venezuelan diplomats in the United States," State Department spokeswoman Marie Harf said.

BERLIN (AP) — North Korea's foreign minister on Tuesday denounced criticism of Pyongyang's human rights record, dismissing a U.N. report that concluded crimes against humanity were committed there and telling the top U.N. rights body that the United States is engaged in a "human rights racket." Last year's report by a panel of U.N. experts detailed abuses including mass starvation and forced abortions. The panel, which interviewed hundreds of defectors, recommended that North Korea's human rights situation be referred to the International Criminal Court.

By Laila Kearney NEW YORK (Reuters) - Federal disaster relief officials have settled with a first swath of Hurricane Sandy victims who were denied insurance claims or underpaid for property damage caused by the historic 2012 storm, attorneys said on Tuesday. New York and New Jersey residents have launched about 1,500 court cases over Sandy flood claims, accusing private insurance companies partnered with the Federal Emergency Management Agency of intentionally and improperly denying their claims. FEMA has tentatively settled 160 of the lawsuits and another 90 settlements were imminent, plaintiffs' attorney Steve Mostyn said. A FEMA spokeswoman confirmed that the agency was in settlement negotiations but declined to comment further.

BIRMINGHAM, England (AP) — Christian Benteke converted an injury-time penalty to earn Aston Villa a 2-1 win over West Bromwich Albion on Tuesday, ending the team's seven-match losing run in the Premier League and provisionally lifting it out of the relegation zone.

Slovenia's parliament voted Tuesday to legalise same-sex marriages and grant such unions equal rights to those of heterosexual couples. Five of the 84 lawmakers present at the session abstained. The bill, proposed by the opposition United Left (ZL), was supported by the ruling coalition's senior Miro Cerar Party as well as other centre-left parties. "This amendment defines marriage as a life-long community of two persons, regardless of their sex, eliminating the discriminative situation in force up to now," Matej T. Vatovec, a ZL legislator, told lawmakers when introducing the bill.

FARGO, North Dakota (AP) — Four American missionaries who were released after several days of detention and questioning by Venezuelan authorities arrived home in North Dakota on Tuesday, saying they were glad to be back but hoped to return to the South American country someday.

SAN DIEGO (AP) — A history scholar selected by Pope Francis to be the new Roman Catholic bishop of San Diego said Tuesday that he will be a "friend" to the Latino community and called for comprehensive immigration reform.

NEW YORK (AP) — Americans may just be getting used to mobile pay, but consumers in many African countries have been paying with their phones for years. Now payment processors Visa and MasterCard want to get a slice of that market, and are launching card services aimed at Africa's growing mobile payment industry.

By Arshad Mohammed MONTREUX, Switzerland (Reuters) - Iran rejected on Tuesday as "unacceptable" U.S. President Barack Obama's demand that it freeze sensitive nuclear activities for at least 10 years but said it would continue talks on a deal, Iran's semi-official Fars news agency reported. Iran laid out the position as the U.S. and Iranian foreign ministers met for a second day of negotiations and as Israeli Prime Minister Benjamin Netanyahu delivered a stinging critique of the agreement they are trying to hammer out. Iranian Foreign Minister Mohammed Javad Zarif and U.S. Secretary of State John Kerry met a day after Obama told Reuters that Iran must commit to a verifiable halt of at least 10 years on sensitive nuclear work for a landmark atomic deal to be reached. "Iran will not accept excessive and illogical demands," Zarif was quoted by Fars as saying.

Chilean President Michelle Bachelet's popularity has plunged to the lowest level of her current administration, a poll found Tuesday after a scandal erupted over a loan to her son's family. Bachelet's approval rating fell five points in February to 39 percent, said polling firm Adimark, adding that 52 percent of Chileans now say they disapprove of her. "Today is without a doubt the worst stumble for the current administration," the pollsters said. Bachelet, who will mark one year in office next week, is scrambling to deal with the fallout of allegations that her son Sebastian Davalos used his influence to get his wife a $10 million loan.

FRANKFURT, Germany (AP) — Bayer Leverkusen needed extra-time goals from Hakan Calhanoglu and Stefan Kiessling to beat second-division Kaiserslautern 2-0 on Tuesday for a place in the quarterfinals of the German Cup.

Prime Minister Benjamin Netanyahu's impassioned speech Tuesday in the US Congress impressed many Israelis in Jerusalem but drew criticism from others who said he was interfering in American affairs. Netanyahu delivered with gusto an address in which he chided Israel's arch-foe Iran and charged that a deal between the Islamic republic and world powers would allow it to develop nuclear weapons. Israelis crowded into cafes and shops in Jerusalem, watching the speech on TV screens and hanging on every word of their leader, who is running for a fourth term in March 17 elections. "Look at how much they respect him," said David Elmaliakh, 50, as he watched congressmen repeatedly interrupted the prime minister's speech with rapturous applause.

ATHENS, Greece (AP) — Greece's new left-wing government is promising to spend 200 million euros ($234 million) this year on assistance programs for people pushed into "extreme poverty" by the financial crisis.

Police arrested two men and a woman in a raid Tuesday over a "potential threat" to a mall near Canada's port city of Halifax, home to the navy's Atlantic fleet. It comes after security officials last month warned shoppers in Canada, the United States and Britain to be on guard after an Al-Qaeda-linked militant group posted a video calling for attacks on Western malls. Halifax Police Constable Pierre Bourdages said a "heavy police presence" was dispatched to the Mic Mac Mall in the Halifax suburb of Dartmouth and the mall was closed for the day, although investigators said the threat had not been confirmed. The Shebab militant group last month specifically threatened the Mall of America in the US state of Minnesota, Canada's massive West Edmonton Mall, London's famous Oxford Street and two malls in France.

During his months on the run, Mexican drug baron Servando Gomez fled on donkeys and hid in a bat-filled cave -- a far cry from his days of showing off in videos and flashing cash in his fiefdom. With the backing of supporters, Mexico's most wanted man "was able to go anywhere," never staying in one place for more than a few days or hours, federal police chief Enrique Galindo said Monday during a media tour of Gomez's hideouts.

PUCON, Chile (AP) — One of South America's most active volcanoes erupted early Tuesday in southern Chile, spewing heavy smoke into the air as lava surged down its slopes, prompting authorities to evacuate thousands of people.

WASHINGTON (AP) — Excerpts from Israeli Prime Minister Benjamin Netanyahu's speech to the U.S. Congress on Tuesday warning against making a deal that could leave Iran on the path toward nuclear weapons:

IRVINE, California (AP) — Federal agents searched more than a dozen homes Tuesday in a crackdown on so-called maternity tourism operators who arrange for pregnant Chinese women to give birth in the U.S., where their babies automatically become American citizens.

Iran denounced as "lie-spreading" a speech Tuesday in which Israeli Prime Minister Benjamin Netanyahu warned the US Congress a nuclear deal being negotiated with Tehran would threaten the world. In a rousing address to Congress, Netanyahu warned Iran was bent on subjugating and terrorising the Middle East, and that it was a threat to the entire world through its nuclear programme.